Let us welcome the new financial year 2014-15. Let us also hope that the new financial year would bring new flavor of tax and investment planning ideas in the lives of tax payers. Let us go through time tested tax and investment strategies for FY 2014-15 to achieve our desired results.

1. Income-tax file for one and all In whose name to make the investment –this should be the first point in the back of your mind before planning investment strategies this year. It is time now for every tax payer in the country to make a resolution to have a separate independent Income-tax file for every member in the family. The objective of this is to achieve tax planning and cut down on your income-tax payments. First, think of your wife. If she does not have a separate independent Income-tax file, start with one.

The concept of gift and loans in the name of your wife will help you to achieve this. However, do remember that your wife can receive gift from any relative other than her husband, father in law and her mother in law. However, the wife is free to take loan with reasonable interest from anyone including the husband. Similarly, adopt the concept of gifting your major children and start having separate independent Income-tax file for your major children.

2. Investments for Hindu Undivided Family tax file in your kittyInvestments made by your Hindu Undivided Family (HUF) can bring rich dividends for you in 2014-15. If you are a Hindu, then it is time now to find out whether you have a separate independent Income-tax file of your Hindu Undivided Family. If still now you have not been instrumental in opening a separate Income-tax file for your Hindu Undivided Family, this is the time when you should start this in your family so that it helps you in the process of tax planning.

The HUF file apart from enjoying the basic income-tax exemption of Rs. 2,00,000 will also continue to enjoy tax deduction in terms of section 80C as well as deduction on interest on housing loans. Also do remember that your HUF file can come into existence whether you have a son or just a daughter and even if you do not have any children, still your HUF file can come into existence right now.

2. Deposits in savings bank accountIn F.Y. 2014-2015 also consider keeping money in the Savings Bank Account specially because the interest rates in the Savings Bank Account have gone up. Further, the biggest advantage is that the interest income from deposits in Savings Bank Account in Banks, Co-operative Society and a Post Office will be exempted up to Rs. 10,000 as per section 80 TTA of the Income –tax Act, 1961. This benefit is available to Individuals and Hindu Undivided Families. The “Time Deposits” interest income would however, not enjoy the deduction, though.

3. Plan for investments for your minor children If you have a minor child or a grandchild, chalk out different strategies for the financial security of the child. If you want to have good income and wealth in the name of the minor child and do not like clubbing of the income of the minor child, think of creating a separate independent 100 per cent “Specific Beneficiary Trust” in the name of the minor child based on the principles enunciated by the various courts, including the Supreme Court of India so that the income of the minor child with special terms and conditions mentioned in the Trust Deed is not clubbed with the income of the parents. It is also possible for you to think of starting a PPF account in the name of the minor child for his or her safety and also do not forget to take out Life Insurance Policies specially in the name of your minor child which will help the process of investment strategy in the years to come for the safety, security of your children.

5. Zero coupon bonds Think of investing in Zero Coupon Bonds in F.Y. 2014-2015. It should be taken as a preferred tool of instrument of investment especially by persons not interested in regular income. Generally the maturity time of Zero Coupon Bond is ten years. Also look into the tax planning aspect at the time of maturity. Because of the benefit of Cost Inflation Index, tax will be virtually nil on your income from Zero Coupon Bonds at the time of maturity. It is also good to gift Zero Coupon Bonds to your minor children aged eight years and above.

6. Tax free bonds If you come in the highest income bracket – that is, if you have an income exceeding Rs. 10 lakhs a year - surely it is worthwhile for you to make your investment in tax free bonds, especially if you calculate the impact of income-tax savings on the same. The investment in F.Y. 2014-15 in tax free bonds would be better than Bank Fixed Deposits. Grab fast the Tax Free Bonds, before they vanish.

7. Postal instruments Do invest in Post Office Instruments like the National Savings Certificate VIII issue, the National Savings Certificates IX issue, Post Office Time Deposit

Receipts and Senior Citizen Savings Scheme keeping in view the aspects connected with tax deduction under section 80C and also the rise in the interest rates. The above items from Post Office will be eligible for 80C deduction. There has also been some increase recently in the interest of these investments which would be effective from the F.Y. 2014-15.

8. Continue investment in Public Provident Fund Continue to keep your investment in the Public Provident Fund Account because the interest income from Public Provident Fund will now be 8.7 per cent. Moreover, such income will continue to be exempted from income-tax. Also do open Public Provident Fund Account for your minor children and spouse. However, the total investment in Public Provident Fund for you and your minor children taken together in a financial year should not exceed Rs.1 lakh. Better invest in PPF Account as soon as possible during the financial year.

9. Real estate investments for the family In case you do not yet own a residential house property, it is time now to start investing in it. The investment in residential property would also bring home for you a special tax deduction under section 24 for the interest payment on loan for the residential property. The maximum deduction would be Rs.1,50,000 for the interest payment. Besides, the repayment housing loan also would enjoy tax deduction under section 80C. It would be better to buy a house in the name of two or more family members so that each one can enjoy tax deduction. From the taxation angle it would not be worth just to buy a piece of land because no tax benefit is available only on land purchase.

10. Time to think on investments in NPS Please focus your investment strategy for F.Y. 2014-2015 on the investment vistas related to the New Pension Scheme. The New Pension Scheme into operation for the last couple of years, but it has not become very popular. It is time to go for the NPS. Study the provisions in detail and try to open separate NPS account for different members in your family. For those tax payers who have high income and considerable wealth, it is recommended that the Tier II account in NPS should also be obtained. If you are completing 60 this year, you should be more careful to immediately open the NPS account in your name. This is mainly because once you have completed 60, you cannot open a new NPS Account. But if you have already have one you can continue contributing to it.

11. New life insurance policies Are you adequately insured? Let this question be asked by every adult income-tax payer. I would like every tax payer to take care of securing his family during the year against any unpleasant eventuality. One of the best ways to protect the family is to adequately insure all family members. It is time for you to sit down and ponder over whether all family members are adequately insured. In most cases, the answer would be a ‘no.’ Hence, during F.Y. 2014-2015 ensure that you are properly insured. Do not forget to take an insurance policy for your daughter too. For all those engaged in business it is time now to think of Married Women Property Act Policy with tons of benefits in years to come.

12. Rajiv Gandhi Equity Savings Scheme For all those tax payers who have never had any exposure in the stock market even till now for them it is good idea to think of this investment during F.Y. 2014-15 so that tax incentive is being made available in the income tax law under Section 80CCG whereby first time investors in the stock market can go in for making investment up to Rs. 50,000 and enjoy a tax deduction equal to 50 per cent of such investment.

13. Investment in gold & silver Purely from investment angle, it makes no sense to invest in gold jewellery for use at a future point of time. Generally, it is seen that people buy jewellery specially during the festive season when there are no making charges. The jewellery is purchased for, say, the marriage of your daughter. But it may take place a decade later. Hence, it is recommended that in F.Y. 2014-2015, you buy jewellery when the purpose is your own use but abstain from investing in jewellry for future use;. It would become outdated by that time. It will, however, be good to buy gold coins and investments through Gold ETF.

14. Chill down and relax for next 100 days A special feature of the tax and investment planning strategy for the financial year 2014-15 is that all tax payers should first chill down and relax specially because in the financial year 2014-15 Budget was not presented on 28th February and that only when the new Government is created only then we will have the Finance Bill. Hence for the first 100 days of the financial year 2014-15 all tax payer may relax so that only when the new Budget is presented that we should start our tax planning for the current F.Y. based in new tax amendments and the new tax deductions as also exemptions.